1. RCI executives indicted for tax fraud and bribery scheme. 2. Executives allegedly bribed auditor, avoiding over $8 million in taxes. 3. RCI shares plummeted nearly 17% after indictment announcement. 4. The company denies allegations and plans to defend itself. 5. Attorney General emphasizes commitment to combat corruption.
The indictment of RCI executives suggests potential operational and financial instability, which historically corresponds to share price declines in similar cases, such as Peerless Systems in 2004 over SEC investigations.
Given the significant nature of the charges and potential financial liabilities, market perception of RCI is likely to be severely affected, influencing investor sentiment and stock performance.
Immediate market reaction to negative news is typically pronounced; lasting effects depend on legal outcomes and further guidance from RCI.